Like a biblical litany, Sony has repeatedly recited a list of games that it believes will make 2008 the year of the PlayStation 3. However, the company will need more than a good year to climb out of the hole it’s in with the console.
The PS3 has cost the Japanese electronics giant $3.3 billion since its launch in late 2006 because of “strategic pricing” under which it sells the console at a loss, according to the annual report filed by Sony with the U.S. Securities and Exchange Commission. “Even if the platform is ultimately successful, it may take longer than expected to recoup the investment, resulting in a negative impact on Sony’s profitability,” the report said…
The year may not even be at the halfway mark, but Sony’s luck will have to change if 2008 will end up the year of the PS3. It will now have to rely on its cast of anticipated holiday hits, such as Resistance 2 and LittleBigPlanet, and the launch of Home, its oft-delayed virtual online community, to drive sales.
There’s always 2009. So they say.
It sounds like Sony is run by a bunch of Cubs fans. “Wait until next year…”
The PS3 was and always will be simply a trojan horse to get BluRay into as many homes as possible and Sony has been willing to lose $10B+ on it as they will recoup far more than this from Bluray license fees and such.
It was NEVER about games and always about bluray and this can clearly be seen from the lack of games that are actually good on the PS3, MGS4 is about it at the moment after more than 18 months on the shelves.
Since Toshiba and their HD format (a format superior in pretty much every way except it held less) was forced out of the high def market thanks to Sony literally giving away billions to the movie studios as ‘marketing grants’ Sony BD player and BD movie prices have greatly risen and the consumer has been screwed once again by the big ‘S’.
Sony now have complete control of as format from soup to nuts, and they really don’t deserve it (as was seen with the rootkit debacle they care NOTHING for their customers and are almost as anti-consumer as Apple).
Well, considering Microsoft is down something like $7 billion over the life span of Xbox 1 and Xbox 360, and Sony made and still made a LOT of money off of the PS2, Microsoft still has a heck of a long way to catch up.
I guess it will be up to the deal that Sony is working on with toyota ,honda and ferrari to get their money back. I still don’t know why you need a blu ray player in an F1 car? I wonder if We will be able to get blu ray in an Accord or Camry? Will you realy notice the Hi def on such a small screen, and I don’t think it will be worth the $2000 option price.
Anybody here know how many years they had to sell the xbox at or below costs to achieve it’s current market share? It’s a little early to begin to measure this device’s success. I suspect Sony’s success with the PS3 will depend more on hires TV sales, perhaps a special offer PS3/Bravia combo…
Let’s not forget we’re talking about SONY!
Get a Wii and get your girlfriend to play with the WiiFit.
http://www.youtube.com/watch?v=v31qxrXsxv0
Unless of course you live in the midwest and you don’t want to see a 300+lbs woman play with it in her undies.
Can you please put this into context? Is this loss within what they estimated when they decided to sell PS3’s for less than they cost to make?
Or have the losses gotten out of control? I don’t see how that is possible. They can always cut the loss by cutting off production of machines. Once they reach their tolerance limit for loss, then they can stem it.
On the other side of the coin, is Sony earning the revenue and profits on the software side that they expect? Is that part of the plan on track?
This is all a non-event.
Consoles are always sold at a loss. The reason is that Game Developers pay a fee to develop for a certain console and per game sold. The more the console sells, the more games they sell, and the more games there is the more the console sells. In the beginning of the life cycle the console is more expensive (mainly not to cannibalise the former model’s sales) and some games are subsidised to create momentum. PS3 is still at the first third of it’s life. It will come around eventually.
#8
Nintendo always made a profit from console sales.
I cannot understand selling a product below costs just to get the platform moving. You would have to have some really good software to make that up! Even Microsoft has learned that. But they actually made a product too cheap and paid for it with high failure rates. Maybe were trying to hard to make things affordable. I have noticed quality really failing in products just to keep them cheap.
I guess they could make up the loss by selling more volume….
We sell at a loss and make up n volume…Hahahaha…
doesn’t work that way. A big volume of loss is a lot of loss…
They sell at a loss to get a platform. The licensing of the platform makes the “volume”.
@10
Example: I sell you a computer, that only I can work on. The computer is $100, that is a loss to me, but I charge you $300 per hour to support the computer.
So, I make my money in support costs, and that negates the loss on the computer.
yeah and I bet half of the PS3’s are still sitting in a few select EBay sellers homes.
So the PS3 was a good deal after all! And to think all the idiots whining about the $600 price, they were getting a $1200 machine and didn’t even know it. Ingrates.